Charitable Giving
Baby Boomers are expected to transfer $30 trillion in wealth to younger generations over the next few years. But, what will they do with it?
Much of the $30 trillion will be spent on things like travel, leisure activities, daily expenses, medical bills, real estate (downsizing after a death), plus financial and health services. This includes up to $400 billion annually on consumer goods, in addition to $120 billion on leisure travel.
A recent Hearts and Wallets study of participants in their 50s and 60s found only 40% planned to leave inheritances, while 30% expected to spend all their money.
Strikingly, Boomers are also more likely to gift their wealth to charitable causes, making the wealth transfer to heirs smaller than anticipated.
Many diverse factors influence why people choose to give; some are altruistic, while others are more pragmatic, such as prospective tax benefits. Regardless of your reasons, it's critical to comprehend the numerous ways you might offer if you're thinking about including charitable giving in your financial strategy to maximize effect and enjoy the necessary benefits.
According to the Giving USA 2021 report, donors bequeathed an eye-popping $41.91 billion to charity in 2020. That represents 9% of all charitable gifts made in 2020 — and more than double the amount given by large corporations. What's more, 2021's figure is just the latest in a long upward march, demonstrating the enduring popularity of this approach.
A bequest is a term used in finance to refer to the act of transferring assets, such as stocks, bonds, jewels, and cash, to people or organizations by the terms of a will or estate plan. Bequests can be offered to loved ones, acquaintances, organizations, or charities.
Before you can plan your bequest you’ll want to have an organization in mind. There are many organizations that can benefit from your generosity at the end of your life, and they're not necessarily the ones you think of first when you think of "charity."
Certainly, traditional charities are excellent choices to which to make a charitable bequest. If you support or admire an organization or foundation that does good work for children or animals, research into diseases, or any other cause you care about, you can make a charitable bequest to that organization and it will surely be appreciated.
Other options include:
- Colleges and universities
- Elementary and secondary schools
- Churches and other places of worship
- Historical societies
- Museums
- Hospitals
Anywhere you might have given a donation during your life is a good candidate for a charitable bequest.
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